Mr. Cicilline
introduced the following bill; which was referred to the
Committee on Ways and
Means

A BILL

To amend the Internal Revenue Code of 1986 to provide for
the taxation of income of controlled foreign corporations attributable to
imported property.

1.

Short title

This Act may be cited as the
Offshoring Prevention
Act.

2.

Taxation of income of
controlled foreign corporations attributable to imported property

(a)

General
Rule

Subsection (a) of section 954 of the Internal Revenue Code
of 1986 is amended by striking the period at the end of paragraph (5) and
inserting , and, by redesignating paragraph (5) as paragraph
(4), and by adding at the end the following new paragraph:

(5)

imported property
income for the taxable year (determined under subsection (j) and reduced as
provided in subsection
(b)(5)).

.

(b)

Definition of
Imported Property Income

Section 954 of the Internal Revenue Code
of 1986 is amended by adding at the end the following new subsection:

(j)

Imported
Property Income

(1)

In
general

For purposes of subsection (a)(5), the term
imported property income means income (whether in the form of
profits, commissions, fees, or otherwise) derived in connection with—

(A)

manufacturing,
producing, growing, or extracting imported property;

(B)

the sale,
exchange, or other disposition of imported property; or

(C)

the lease, rental,
or licensing of imported property.

Such term
shall not include any foreign oil and gas extraction income (within the meaning
of section 907(c)) or any foreign oil related income (within the meaning of
section 907(c)).(2)

Imported
property

For purposes of this subsection—

(A)

In
general

Except as otherwise provided in this paragraph, the term
imported property means property which is imported into the United
States by the controlled foreign corporation or a related person.

The term imported property includes any
property imported into the United States by an unrelated person if, when such
property was sold to the unrelated person by the controlled foreign corporation
(or a related person), it was reasonable to expect that—

(i)

such property
would be imported into the United States; or

(ii)

such property
would be used as a component in other property which would be imported into the
United States.

(C)

Exception for
property subsequently exported

The term imported
property does not include any property which is imported into the United
States and which—

(i)

before substantial
use in the United States, is sold, leased, or rented by the controlled foreign
corporation or a related person for direct use, consumption, or disposition
outside the United States; or

(ii)

is used by the
controlled foreign corporation or a related person as a component in other
property which is so sold, leased, or rented.

(D)

Exception for
certain agricultural commodities

The term imported
property does not include any agricultural commodity which is not grown
in the United States in commercially marketable quantities.

(3)

Definitions and
special rules

(A)

Import

For
purposes of this subsection, the term import means entering, or
withdrawal from warehouse, for consumption or use. Such term includes any grant
of the right to use intangible property (as defined in section 936(h)(3)(B)) in
the United States.

(B)

United
states

For purposes of this subsection, the term United
States includes the Commonwealth of Puerto Rico, the Virgin Islands of
the United States, Guam, American Samoa, and the Commonwealth of the Northern
Mariana Islands.

(C)

Unrelated
person

For purposes of this subsection, the term unrelated
person means any person who is not a related person with respect to the
controlled foreign corporation.

(D)

Coordination
with foreign base company sales income

For purposes of this
section, the term foreign base company sales income shall not
include any imported property
income.

.

(c)

Separate
Application of Limitations on Foreign Tax Credit for Imported Property
Income

(1)

In
general

Paragraph (1) of section 904(d) of the Internal Revenue
Code of 1986 is amended by striking and at the end of
subparagraph (A), by redesignating subparagraph (B) as subparagraph (C), and by
inserting after subparagraph (A) the following new subparagraph:

(B)

imported property
income,
and

.

(2)

Imported
property income defined

Paragraph (2) of section 904(d) of such
Code is amended by redesignating subparagraphs (I), (J), and (K) as
subparagraphs (J), (K), and (L), respectively, and by inserting after
subparagraph (H) the following new subparagraph:

(I)

Imported
property income

The term imported property income
means any income received or accrued by any person which is of a kind which
would be imported property income (as defined in section
954(j)).

.

(3)

Conforming
amendment

Clause (ii) of section 904(d)(2)(A) of such Code is
amended by inserting or imported property income after
passive category income.

(d)

Technical
Amendments

(1)

Clause (iii) of
section 952(c)(1)(B) of the Internal Revenue Code of 1986 is amended—

(A)

by redesignating
subclauses (II), (III), (IV), and (V) as subclauses (III), (IV), (V), and (VI),
and

(B)

by inserting after
subclause (I) the following new subclause:

(II)

imported property
income,

.

(2)

The last sentence
of paragraph (4) of section 954(b) of such Code is amended by striking
subsection (a)(5) and inserting subsection
(a)(4).

(3)

Paragraph (5) of
section 954(b) of such Code is amended by striking and the foreign base
company oil related income and inserting the foreign base
company oil related income, and the imported property income.

(e)

Effective
Date

The amendments made by this section shall apply to taxable
years of foreign corporations beginning after the date of the enactment of this
Act, and to taxable years of United States shareholders within which or with
which such taxable years of such foreign corporations end.

Follow us?

Welcome to GovTrack.us

Thank you for giving GovTrack a try. Like OpenCongress, GovTrack is for researching and tracking legislation before the U.S. Congress.

★

Things here should seem very familiar to you. OpenCongress and GovTrack have always had a data sharing partnership, so you’ll find the exact same information here as what you had on OpenCongress, just arranged a little differently.

And GovTrack has actually been here for more than a decade. This is the site that began the movement to improve access to Congress using technology.

Congress is about to wake up.

When President-elect Trump takes office on January 20, the House, Senate, and White House will be controlled by the same party for the first time in six years.

Things are going to happen fast. Congress is expected to move quickly on Trump's agenda using the same tactics immune to the filibuster that Democrats used to enact the Affordable Care Act in 2010.

Now more than ever we need transparency in Congress.

Over the last year we’ve helped 10 million Americans track Congress using bill alerts. We hope to continue GovTrack Insider, where we put the most important legislation into plain English. We've also worked with Congress on improving transparency at the source.

We now need your help. We’re simply out of money. We can’t continue GovTrack Insider or improve our bill tracking tools without your financial support. Important pieces of GovTrack will end on December 31 if we can’t pay for it. If you are able, please: